CNN Newsroom: Interview With Rep. Josh Harder (D-CA)
Interview
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That's our hope. I think when people hear about Silicon Valley Bank, they think this about Mark Zuckerberg or Elon Musk. That's not who is affected by this at all. This is, you know, the craft company (inaudible) that pays its mom-and-pop merchants all across the country through Silicon Valley Bank. This is farmworkers and the agricultural and wine making parts of my district who are affected by this.
I've heard from so many people who aren't sure if they're going to be able to pay rent next week. And so, we absolutely need more clarity and urgency on a solution tonight to make sure that folks have confidence going into Monday.
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I think that's right. I think this is a real inflection point for regional banking, possibly with even greater risk that we saw in the financial prices or the savings-and-loan crisis during the '80s. Silicon Valley Bank had $42 billion of withdrawal in a single day. The fastest bank run in history. This is not "It's a Wonderful Life" in the digital era. Confidence can disappear faster than a Snapchat message.
And so, if we're going to make sure that people have enough confidence who are, you know, folks that have uninsured deposits in regional banks across the country, then we're going to need a lot more clarity this evening going into tomorrow.
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I don't think there should be a bailout of bank managers or owners who made failed decisions to get ourselves into this mess to begin with. But we need to make sure that workers get paid and to make sure that this contagion doesn't spread to other regional banks. I think we need a three-part plan.
First, we need a timely sale of SVB's assets tonight, hopefully one that guarantees 100 percent of those deposits for innocent depositors who did absolutely nothing wrong. And then second, we need to immediately raise the insurance limits to make sure that more people have confidence and don't feel like they have to withdraw all their money going into tomorrow.
And third, I think we need some type of federal backstop, especially for the small and midsize regional banks to make sure that they have enough confidence and enough liquidity for people that are in that spot where they feel like they have to go and line up at their bank tomorrow.
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There absolutely needs to be accountability for the bank managers that got us into this situation. They paid themselves millions of dollars in bonuses the day before this bank collapsed. Many of them sold stock just a few days before Silicon Valley Bank went under. I think we should look at potentially (inaudible) some of that money back especially if depositors are not in a position to be made whole tomorrow.
And we need to look at regulators who should have been better able to stress test this bank and anticipate crisis moments like this well before. We're going to need some banking reform. But our number one and number two goals going in to tonight and tomorrow have to be protecting workers who did absolutely nothing wrong and need to be in a position to get paid.
And second, stopping this contagion from spreading. What happened in Silicon Valley Bank is that real potential to happen to other regional and midsized banks across the country, unless there's more decisive action in the next few hours.
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That's what I've been told, that they are putting that together. I know that they are evaluating options for the bank's assets. I think sooner is much better in this situation. There is a big difference between a resolution and a clarity that happens over the next couple of hours than something that happens at 8:59 a.m. tomorrow just before markets open.
And so, my hope and my message to the Treasury Department and to the secretary has been let's get this done as soon as possible. And let's -- I believe that a sale of the bank assets tonight is going to solve this problem entirely. We also need to give certainty and confidence to folks and other midsize banks who are looking at their deposits that maybe uninsured and wondering what's going to happen to them.
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Thank you.
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